ACEEE: Combined Heat and Power Could Replace 100% of Retiring Coal Plant Capacity in States across the Country

Utilities across the country could use combined heat and power (CHP) to more cheaply replace a substantial portion of the coal-fired electric-generating capacity expected to retire in the near term, according to Coal Retirements and the CHP Investment Opportunity, a new report issued today by the American Council for an Energy-Efficient Economy (ACEEE).

The report estimates coal retirements in 12 energy-intensive manufacturing states. Coal-dependent states like West Virginia, which expects to see up to 11 percent of its total electric-generating capacity retire, could replace about one-third of that lost generation with utility-owned CHP. Alabama and North Carolina could replace over half of their retiring coal plants with CHP. States with smaller levels of expected coal retirements, such as Kansas and South Carolina, could replace all of their lost capacity with CHP. Other states included in the report are Colorado, Georgia, Indiana, Iowa, Kentucky, Louisiana, and Ohio.

CHP systems use a single fuel source to concurrently produce electricity and thermal energy. Heat is a byproduct of most electricity generation-but while traditional power plants waste that heat by releasing it into the air or nearby water, CHP systems capture it and put it to productive use, such as generating steam that is then used in manufacturing processes. ACEEE’s report analyzes the potential for new CHP at energy-intensive industrial and commercial facilities, and finds that by encouraging utilities to invest in CHP on customer sites, states could more easily meet future demand and offset some or all of the need to invest in new expensive power plants.

A typical new natural gas-powered CHP system can generate electricity at a cost of 6 cents/kWh, while the cost of new natural gas-powered traditional generation or nuclear-powered generation can range from 6.9 to 11.3 cents/kWh. CHP is not only more cost-effective than traditional centralized generation, but it is also cleaner and more efficient, squeezing more useful energy out of every unit of fuel. CHP can generate electricity and thermal energy at efficiencies of up to 85 percent, while the average electric generation efficiency of U.S. power plants is about 33 percent.

An estimated $70 to $180 billion will be invested in new power plants or pollution controls for existing ones in the coming years. Rather than spend that money on expensive, inefficient, and dirty energy resources, utilities could spend it on new CHP systems at customer sites.

The House Energy and Commerce Committee‘s Energy and Power subcommittee has a hearing Thursday, Sept. 20, to discuss the EPA’s proposed New Source Performance Standards for power plants, which would require new coal-fired power plants to install carbon capture and storage (CCS) technology. The hearing is part of the American Energy Initiative series.

The House is expected to vote by Friday on the federal greenhouse gas regulations bill and other White House policies that Republicans allege are harming the coal industry, citing job losses at coal miner Alpha Natural Resources. Meanwhile, layoffs announced by wind energy equipment maker Siemens are cited as evidence why lawmakers must extend tax credits for wind projects, The Hill reports.